January 2010 Business Magazine

Vote

THINGS YOU CAN DO TO KEEP PENNSYLVANIA PRODUCING

1. StayconnectedtotheMBAGovernmentAffairsofficethroughour FacebookpageandTwitter.

2. Keepuponlocal,stateandnationalnewsbyreceivingtheMBA’sdailyonlinenewsletter,News You Can Use.

3. Contactyourlocal,stateandfederalelectedofficialstovoice your opinion onbusinessissuesimportanttoyou.

4. SubscribetoThe Hill Midweek Report–yourweekly“go-to”resourceforstateandfederalupdates,hottopics,actionalertsandupcomingevents.

5. VisittheMBA’sonlineadvocacyprogramCapwiz.

5Each Month Each Year

1. Readthe“On the Hill”sectionoftheBusiness Magazine,forin-depthcoverageofbusiness-relatedlegislationandhappenings.

2. FindouthowyourstateandfederallegislatorsscoredontheMBA-Key Votetrackingsystem.

3. ReadtheIssues 2009: MBA Leg-islative Priorities Briefing Book,forsolutionstokeychallengesfacingthebusinesscommunity.

4. AttendLegislative Luncheons sponsoredbytheMBAandheardirectlyfromelectedofficials.

5. VoteintheKeep Pennsylvania Producing online polls.

1. Voteintheprimaryandgeneralelectionsandsupportpro-business,pro-growthcandidates.

2. GrowtheMBA-PACandsupportpro-businesscandidateswithapersonalfinancialcontribution.

3. LobbyyourlegislatorsatMBA-sponsoredHarrisburgandWashington,D.C.Hill visits.

4. Invitelegislatorsforaplant touratyourfacilitytoeducatethemontheimportanceofmanufacturingjobs.

5. ParticipateintheEconomic Snapshot Survey.

Join Keep Pennsylvania Producing, the MBA’s advocacy coalition, at www.mbausa.org/government-affairs.

55Each Week

5

BUSINESSM A G A Z I N E

Manufacturer & Business Association VOLUME XXIII, NUMBER 1 JANUARY 2010

Stairways Behavioral Health pg.10

Stepping Up to a Better Way of Life for Nearly 50 Years

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Lawr ence, Lycoming, Luzerne, McKean, Mercer, Mi"in, Montour, Northumberland, Perry, Potter, Schuylkill, Somerset, Snyder, Sullivan, Susquehanna, Tioga, Union,

Community Resources for Independence Service Map

Crawford, Cumberland, Huntington, Indiana, Je#erson, Juniata,

Venango, Warren, Wyoming and Counties.

CRI o#ers Center for Independent Living & Attendant Care Program services in Clarion, Crawford, Erie, Forest, Venango and Warren counties.

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22DEPARTMENTS > 4 / Business Buzz14 / HR Connection

15 / On the Hill 16 / Legal Q&A24 / People Buzz

4

10FEATURES > 3 / SpotlightJames Campbell, Ed.D., president of Williamsport-based Hope Enterprises, talks about the organization, and how it is enhancing the lives of individuals with developmental disabilities in the communities in which it operates.

10 / Stairways Behavioral HealthCEO Bill McCarthy discusses the past, present and future of Stairways Behavioral Health and its role in assisting those with mental health-care needs.

15 / On the Hill MBA Government Affairs Director Sheila Sterrett addresses the importance of the MBA-PAC as a vehicle for a united business voice in the political process.

SPECIAL SECTION > 20 / Happy AnniversaryOur special anniversary section recognizes the more than 460 Association member companies celebrating milestone anniversaries in 2010.

January 2010

READ AROUND THE WORLDRay Schaney of CTI Physical Therapy in Erie enjoys the view and the Business Magazine at Poseidon’s Temple in Greece. Going somewhere soon? You too can be a Business Magazine star! Take a recent issue along on your next trip, take a picture and e-mail it to [email protected]!

3Blue Ocean Strategy Center

UPCOMING EVENT >Join us for Eggs ’n’ Issues at 8 a.m. Thursday, January 21, at the Association’s Conference Center in Erie, as Erie County District Attorney Jack Daneri explains the new approaches prosecutors are utilizing in a “CSI” world.

EDITORIAL > 5 / Health MattersDealing with depression in the workplace.JAMES SCHUSTER, MD

7 / Legal BriefSome critical topics to consider when joining the Board of Directors for a charitable organization.MICHAEL THOMAS

9 / Financial AdviserWhy nonprofit organizations need to closely monitor endowment income distributions.VINCENT F. HALUPCZYNSKI

19 / Energy Q&AAn update on the Employers’ Energy Alliance of Pennsylvania, Inc. and how it can help companies save on their energy costs. J. DAVID BELL

25 / Blue Ocean StrategyHow Blue Ocean Strategy is upending traditional approaches and charting bold new paths in business strategy. ANGIE ANGUS

January 2010 > www.mbausa.org > 1

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The Sight Center of Northwest Pennsylvania 2402 Cherry Street Erie, PA 16502

Web site: www.sightcenternwpa.org

Phone: 814/455-0995

Blind … Blinded … Blindness … We all hope that it won’t happen to us, but vision loss is a very real fact of life for many families right here in our own hometown.

The Sight Center of Northwest Pennsyl-vania is very important to this com-munity:

• Erie has one of the highest rates of blindness and visual impairment in the nation due to the older age of its residents (25-percent higher than the U.S. average) and extremely high rate of diabetes (nearly twice the national average).

• You probably know someone or have a family member with macular degeneration, diabetic eye disease or glaucoma. The number of people suffering from these conditions — right here in our county — will rise dramati-cally over the next 20 years.

• The Sight Center of Northwest Pennsylvania, originally the Erie Center for the Blind, was founded in 1938 to confront the devastating challenges of vision loss by fulfilling its threefold

mission: to prevent blindness, to re-habilitate those who are losing their sight, and to support those who are blind.

• The Sight Center is the region’s only full-service vision rehabilitation facility providing vision rehabilita-tion, occupational therapy, magnifi-cation devices, reduced-cost eye ex-ams and eye glasses for low-income adults and children, vision screening for pre-school and special-needs children, reading services, “door-through-door” transportation, as-sistance with grocery shopping and paying bills, and support groups. The Sight Center’s services pick up where those of ophthalmologists, optometrists and other health agen-cies leave off.

• The Sight Center’s programs allow older citizens to live more indepen-dently and age in place longer rather than be sent to personal care facilities. They also screen more than 5,000 area children to detect lazy eye and crossed eyes before these conditions become permanent.

CompanyPROFILE

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SPOTLIGHT > by Karen Torres

VOL. XXIV, NO. 1 JANUARY 2010

© Copyright 2010 by the Manufacturer & Business Association. All rights reserved. Reproduction or use of editorial, pictorial or advertisements created for use in the Business Magazine, in any manner, without written permission from the publisher, is prohibited. Unsolicited manuscripts cannot be returned unless accompanied by a properly addressed envelope bearing sufficient postage. The maga-zine accepts no responsibility for unsolicited manuscripts or artwork. The Business Magazine and Manufacturer & Business Association do not specifically endorse any of the products or practices described in the magazine. The Business Magazine is published monthly by the Manufacturer & Business Association, 2171 West 38th Street, Erie, Pa. 16508. Phone: 814/833-3200 or 800/815-2660.

Mission StatementThe Manufacturer & Business Association is dedicated to providing information and services to its members that will assist them in the pursuit of their business and community interests. – Board of Governors

Manufacturer & Business Association 2171 West 38th Street Erie, Pa. 16508 814/833-3200 or 800/815-2660 www.mbausa.org

Manufacturer John Cline & Business Dale Deist Association Board Timothy Hunter of Governors Dan Ignasiak Richard Knight Mark C. Kulyk John B. Pellegrino Sr., P.E. Dennis Prischak Robert S. Pursell Timothy G. Shuttleworth Lorenzo Simonelli Sue Sutto Philip Tredway

Editor in Chief Ralph Pontillo [email protected]

Executive Editor John Krahe [email protected]

Managing Editor & Karen Torres Senior Writer [email protected]

Contributing Angie Angus Writers J. David Bell Jessica Crocker Vincent F. Halupczynski James Schuster, MD Michael Thomas

Photography Bruce Bennett Photography 814/899-1161

Advertising Sales Lori Maus Joint 814/833-3200 or 800/815-2660 [email protected]

Design, Production Printing Concepts Inc. & Printing [email protected]

Please describe Hope Enterprises and its mission. Our mission is to enhance the lives of people with development disabilities by providing them with responsive services and supports, which we have been doing for 57 years. We were founded by a group of parents on November 14, 1952 to fill a void in society that disallowed people of all ages with development disabilities to be served in their local school system as well as feel welcomed in their community.

To stay focused on its goals, Hope Enterprises has adopted a unique approach to team leadership. Please explain. When we approach and orient our employees – we do it from a couple of key words – teamwork, empowerment and ownership. When you look at who we are and what we do, the common denominator is that we are a people business; teamwork means that we are our greatest resource. Our people are trained to do their job, but they also are empowered to do their job and make improvements to do those duties. Empowerment means our employees are self-directed. They must take initiative and have the interest level to make the changes – that’s responsive. We also want them to feel a sense of ownership. We are a private nonprofit corporation that spends more than $22 million each year, and we want our staff to be involved at departmental meetings while giving them decision-making opportunities and treat them as if they are an owner, instead of the traditional top-down directive-driven business model. This allows us to maximize our staff resources.

What are some of the key services that Hope Enterprises provides? We have an Early Learning Program in which Home Educators serve children from birth to age 3 in their homes and two center-based programs that serve children from 3 to 5. For adult services, we have Habilitation Services comprised of Vocation Rehabilitation in Williamsport and Renovo. For those program participants with the potential for advanced job training and employment, we have our Community Employment Services available. This consists of three components: Community Employment Services, Community Access Program and FOCES (Focus on Community Employment Services). We also have an Adult Training Facility serving as a social/recreational weekday program designed to meet the needs of physically, medically and behaviorally involved individuals. Our Community Supports Program provides an array of individualized services and supports to individuals.

The largest program of all is residential services. We have group homes in 46 locations in all seven counties, where these individuals can live together onsite. We also have in-home services, where our staff can come to your house to help with your child, and life-sharing services where children and adults with development disabilities are placed with another family.

In addition to life skills, Hope Enterprises also provides job training and vocational workshops. Please explain. Our Work Center has 130 individuals that attend every day and do contract work, and we also have a vocational rehabilitation program, which helps people find their place in the community as an adult. Within this group of people, our ultimate goal is to provide them with different skills that they need to acquire. Currently, our Work Center is in need of contract work, from light assembly, packaging to mailing.

How would you describe Hope Enterprises’ relationship with the community? We’re still flourishing and getting things done because of the support we enjoy from the communities we serve. In Williamsport, where Hope Enterprises was born, we have a lot of opportunities for people to call up to donate and we are blessed with a lot of community support. In fact, we have a Board of 32 people from the community, including seven to eight who are parents of people that we serve.

What are some of your biggest challenges in 2010? We are forever adapting to state and local budgets and how that effects our programs and budgets. In all honesty, the sources of revenue are not keeping pace with the people we are serving, so we have to prioritize and cover as much ground as we can. With that being said, in 2010 or any year, our challenge will always be our ability to recruit and retain qualified staff. Our business is based on staff; Hope is only as good as the employees it recruits and retains.

James F. Campbell, Ed.D. is the president of Williamsport-based Hope Enterprises, Inc., a comprehensive service provider of programs and services for those with developmental disabilities, employing 600 full-time and part-time people and serving approximately 800 families in Lycoming, Clinton, Northumberland (LCN) as well as Columbia, Montour, Snyder and Union (CMSU) counties. Campbell recently spoke with the Business Magazine about the organization, and how it is enhancing the lives of these individuals and impacting the community in which it operates.

From left: Melody A. Wolf, vice president of Planning, Development and Support Services; Frank L. Forsha Jr., vice president of Programs and Services LCN Region; Lorraine M. Gates, vice president of Administration and Human Resources; James F. Campbell, president; Carol J. Drumheiser, vice president of Programs and Services CMSU Region; and Joel E. Weaver, vice president of Financial Operations.


Business Buzz DEPARTMENTS > Contact: Jessica Crocker

MBA TO OFFER EVENING COMPUTER COURSESBeginning next month, the Manufacturer & Business Association (MBA) will offer its popular computer courses at night. The first class that will be available is the two-day Excel 2007 Level 1 course, from 6 to 9 p.m. on February 2 and 10 at the Association’s Conference Center, 2171 West 38th Street at Pittsburgh Avenue in Erie. Cost is $155 for members; $275 for nonmembers.To register or for complete course schedules, click on the “Computer Training” button on www.mbausa.org.

MUNCY MACHINE & TOOL CO. MARKS MILESTONE ANNIVERSARY Muncy Machine & Tool Co. in Turbotville, Pennsylvania, recently marked its 60th anniversary in 2009 as a machine shop that serves the global wire rope industry and the local machine servicing needs of the area in which it operates.Muncy Machine & Tool Co., Inc. is the successor to Muncy Machine & Repair

Company, founded in 1949. In addition to general repair work, the company began machining parts for J&L Wire Rope in Muncy and Bethlehem Steel in Williamsport, Pennsylvania, and over the years expanded to service other companies in the wire rope industry. In December 1977 the company moved to its current location near

Turbotville, Pennsylvania, which consists of a manufacturing plant and office complex that was expanded in 2008. Its sister company is the Upson Walton Company.For more information, visit www.muncy-upson.com.

From left: Sandi Carangi, vice president of Business Development, and Carol Laemmerhirt, Business Relationship Officer of Erie FCU, accepted the award on behalf of the credit union.

ERIE FEDERAL CREDIT UNION EARNS EXCELLENCE IN LENDING AWARDThe Erie Federal Credit Union recently received CUNA Mutual Group’s Excellence in Lending Award at the 15th annual Credit Union National Association Lending Council Conference in San Diego, California.According to the credit union, Erie FCU had a pivotal year by initiating a strategic marketing plan to increase business lending and business relationship accounts. As a result, Erie FCU experienced 32-percent loan growth, increased average loan balances, and a jump in loan-to-share ratio. The incorporation of a non-traditional marketing plan helped significantly, driving hundreds of potential members to the credit union’s Web site.For more information, visit www.eriefcu.org.

4 < www.mbausa.org < January 2010

Employers may be surprised to learn that 16.5 percent of employees in the United States – or, about 1 in 6 – are affected by major depression. It also may come as a surprise to them that most employees receive inadequate treatment or none at all.

Obviously, depression in the workplace can affect missed days and productivity as well as health-care costs within an organization. A survey by the RAND Corporation found that patients with depressive symptoms spend more days in bed than those with diabetes, arthritis, back problems, lung problems or gastrointestinal disorders. No job category or professional level is immune from depression, and even an employee who has been outstanding in the past can be affected.

It is estimated that depression in the United States costs employers $44 billion in lost production time. Workers with depression lose an average of 5.6 productive hours per week, as compared to 1.5 for workers without depression. Depression increases absenteeism risk for employees.

However, there are many good options for employees with depression. For more than 80 percent of people with depression, treatment is clearly effective. Most people are able to recover and return to satisfactory, functioning lives. Treatments such as medication, or short-term talk therapy, or some combination of both, provide relief.

Depression in Western PennsylvaniaWestern Pennsylvania employees

Dealing With Depression in the Workplacehave depression rates of more than 20 percent. This is true across all industries – from high tech to heavy manufacturing, from white-collar to blue-collar – as well as in all settings, from rural to urban.

For employees with chronic illnesses such as asthma, cardiac disorders, diabetes, and lung disease, co-morbid depression is associated with increases of 20 percent to 80 percent in the average cost of care relative to other employees. Depending on the reason for absence, absenteeism among employees with depression can range up to 100-percent higher than for employees without depression.

Steps an Employer Can Take to Help Employees With Depression1. Talk with your insurance provider

or broker. Learn what services related to depression screening and treatment are available to your employees at the moment and what services could be made available to them.

2. Offer your employees a health plan that covers depression screening and treatment.

3. Offer your employees a health plan that increases the opportunities for their depression to be identified and treated, by providing for depression screenings and care to be delivered by a wide variety of professionals. Depression often exists in conjunction with another health condition, and the time at which the employee is being treated for that condition provides a good opportunity for depression to be recognized so

that treatment can begin.

4. Become informed about depression in the workplace and how it can be successfully treated.

Don’t Be Quick to JudgeOn-the-job behaviors – such as decreased or inconsistent productivity, absenteeism, decreased interest in work and increased errors – can indicate depression, but they also could be indicative of any number of other problems. As a leader, you have an excellent opportunity to help your employees. When you recognize that something appears to be wrong, you can refer the employee to an employee assistance professional or occupational health nurse, if those are available, or to a health-care provider. If you are unsure where to refer the employee, you can call your insurance provider.

For more information, visit the Web site www.upmchealthplan.com.

Health MattersEDITORIAL > by Dr. James Schuster

James Schuster, MD, is chief medical officer for Community Care Behavioral Health, a nonprofit behavioral health managed care organization. Community Care is part of the integrated partner companies of the UPMC Insurance Services Division – which also includes UPMC Health Plan, UPMC Work Partners, LifeSolutions, UPMC for You (Medical Assistance), and E-Benefits – and which offer a full range of insurance programs and products.


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In 1936, a small group of General Electric employees gathered to explore the possibility of forming a credit union for their co-workers. What began as an informal discussion has grown into the present-day Erie General Electric Federal Credit Union with more than 200 million in assets and serving over 30,000 members through its seven area locations.

Offering services similar to what con-sumers might find at a for-profit bank, the Erie GE Credit Union, a not-for-profit financial cooperative, seeks to make a further impact in the lives of those who live in our community. The Credit Union is a member-owned financial institution and thus charged with service to its members and the surrounding com-munity. With volunteerism paramount to its mission, the Credit Union established a Growing In Volunteer Efforts (GIVE) Committee.

Since its inception in October 2006, the GIVE Committee has been able to raise funds for a multitude of charitable organizations that benefit the Erie region. It also publishes an annual

charitable “Giving” calendar, highlighting 12 different monthly charities for which employees and credit union member-ship raise funds and awareness.

These efforts have not gone unnoticed. The General Electric Credit Union was awarded, for the second straight year, Erie’s Choice in Credit Unions and last year, the Credit Union was honored to accept the CUNA (Credit Union National Association) Community Credit Union of the Year Award. Winning this prestigious national award was due largely to its unyielding commitment to the spirit of community and volunteerism.

Charitable efforts aside, what began as a credit-cooperative for General Electric employees and their families, has blos-somed into a strong financial institution that anyone in Erie or Crawford counties can join. As long as you live, work, wor-ship, or attend school in these counties, you too can be a part of something great; something that embodies the true meaning of community. The Erie General Electric Federal Credit Union looks forward to serving you and your family soon!

CompanyPROFILE

The Erie General Electric Federal Credit Union

Erie General Electric Federal Credit Union 2154 East Lake Road Erie, PA 16511

Contact: Trent Mason, CMO

E-mail [email protected]

Phone: 814/464-8265

Web site: www.egefcu.org

Credit Union CEO Gail Cook accepts the prestigious National Community Credit Union of the Year award.

Charitable organizations are playing an increasingly important role in our communities, and the purposes for which charitable organizations are being formed continue to expand. At some point in your career, you likely will be asked to serve on the Board of Directors of a charitable organization. While the responsibilities associated with your new position will vary greatly depending upon the specific charity, the following discussion may help you add value to the organization.BackgroundThe first step is to find out as much information as you can about the specific charity. Speak to as many of its representatives as possible. Make sure you understand the organization’s charitable mission and ask for an overview of its operations. Find out exactly what will be asked of you and how much time you will be expected to dedicate to the organization. For existing organizations, review all financial statements, tax returns, annual reports, and other operating data that the organization can supply to you. Much of this data (for example, IRS Form 990) is available online.For start-up organizations, ask to review the business plan. Be certain that plan contains specific, detailed information regarding the organization’s budget and the structure of its operations. Make sure the assumptions contained in the business plan appear reasonable.StructureIt is also very important to understand and evaluate the legal structure of the organization. The charity should have organizational documents, such as Articles of Incorporation, which contain very basic information regarding the entity. The charitable organization should also have Bylaws that provide more specific information regarding governance/management and the scope of the authority granted to the organization’s Board of Directors and other management personnel. The

Bylaws should also contain a detailed conflict of interest policy. It is important that the Bylaws are carefully drafted and tailored to meet the needs of the specific organization, and that the charity is actually operated in a manner that is consistent with the Bylaws.For organizations that have already been granted tax-exempt status by the Internal Revenue Service (IRS), ask to review the IRS determination letter. If not tax-exempt, the Directors may consider whether such status is desirable. OperationsRegardless of the charity, it is important to understand the obligations associated with your new role. Each Director has a duty of care requiring that he or she act prudently when handling corporate affairs. This duty involves attending and participating in board meetings, keeping abreast of the organization’s operations and finances, and obtaining any information necessary to make informed decisions on behalf of the organization. Directors must act at all times with the best interests of the organization in mind. This means that Directors must avoid acts of self-dealing. It is also important to avoid conflicts of interest and to maintain strict adherence to the organization’s conflict of interest policy. Once assets are dedicated to charitable purposes, the Directors essentially act as the trustees of the charitable assets and hold such assets for the benefit of the public. The Pennsylvania Attorney General and the local Orphans’ Court provide oversight to make sure charitable assets are not diverted from their intended purposes, and charities must often obtain prior approval before entering into certain transactions. It is imperative for Directors to understand the restrictions on the use of charitable assets. The Directors may consider purchasing Directors and Officers Liability Insurance to protect them from personal liability for decisions made on

behalf of the charity. ComplianceDirectors of charitable organizations also are responsible for compliance with all federal and state statutes and regulations, and must be sure to keep adequate records and implement necessary financial controls. For instance, charities must file an annual information return with the IRS. Charitable organizations also must file annual statements with the Pennsylvania Department of State, and, depending on the particular charity, various other Pennsylvania agencies. ConclusionWith careful planning and evaluation of a particular charity’s organizational structure and operations in light of the foregoing parameters, the Directors can avoid potential management issues and focus their attention on achieving the organization’s charitable mission. Additional information for Directors of charitable organizations is available in Pennsylvania Attorney General Tom Corbett’s Handbook for Charitable Nonprofit Organizations (available online at www.attorneygeneral.gov). For further questions about legal matters regarding nonprofit organizations, contact Mike Thomas at MacDonald, Illig, Jones & Britton LLP at 814/870-7711 or [email protected].

Legal Brief

Michael P. Thomas is an associate at the law firm of MacDonald, Illig, Jones & Britton LLP. A graduate of Juniata College and the Dickinson School of Law of the Penn State University, he practices in the areas of estate planning, estate and trust administration, tax and business law.

Considerations When Joining a Board

EDITORIAL > by Michael Thomas


Vincent F. Halupc-zynski, CPA heads the Not-for-Profit/Tax-Exempt Orga-nizations Group of Malin Bergquist, Erie’s fastest growing public accounting firm. Contact him at [email protected] or 814/454-4008.

Recently issued guidance from the Financial Accounting Standards Board (FASB) is requiring many nonprofit organizations to take a closer look at the operations, accounting and financial state-ment disclosures related to their endowments.FASB is a private, not-for-profit body created to protect the public’s interest by developing generally accepted accounting principles. The guidance officially is called FASB Staff Position (FSP) 117-1 – and is entitled “Endowments of Not-for-Profit Organizations: Net asset Classification of Funds Subject to an Enacted Version of the Uniform Prudent Management of Institutional Funds Act.” One of the matters nonprofits need to address and consider is state law as it applies to endowment funds (this is also a required financial statement disclosure under FSP 117-1). Pennsylvania is one of three states that have not enacted a version of the Uniform Prudent Management of Institutional Funds Act (UPMIFA). Pennsylvania Act 141 governs Pennsylvania law regarding nonprofit endowments. PA Act 141 applies to investments/property held in trust (or donor restriction) as a restricted endowment only the “income” of which may be expended currently.Nonprofit boards may elect to be governed under the Act, unless the gift/endowment is governed under a trust instrument or a donor restriction that is contrary to the Act. The law entails adopting and following a total return investment policy, and adopting a spending

policy. The election must be in writing, must specifically recite the subsection, and must be maintained with the organization’s permanent records. The election is typically made as a motion and documented in the organization’s Board minutes. The election is not filed with any department of the Commonwealth.If the election is made, “income” is defined as a percentage of the value of the endowment assets. The Board must annually select in writing a percentage (from 2 percent to 7 percent) each year as income, determined to be “consistent with the long-term preservation of the real value” of the fund. The percentage selection must be maintained with the organization’s permanent records; again, this is typically done by a motion passed by the Board and documented in the Board minutes. The value of the endowment assets is its fair market value determined at least annually and computed as the fair market value averaged over a period of three or more preceding years (or the entire holding period if less than three years).If an election is not appropriately made under the Act, then “income” is defined under prior Pennsylvania law as interest, dividends, rents and royalties; that is, realized and unrealized gains are not income available for distribution. Realized and unrealized gains are added to the corpus or principal of the endowment fund. Additionally, under prior state law, the Board could allocate net realized gains to income as long as the total income

distribution was not in excess of 9 percent of the remaining value of the endowment fund (any excess would be added to principal). However, this “9-percent rule” was repealed by Act 141, so income available for distribution is simply interest, dividends, rents and royalties if a valid act election is not made.The problem with not making the election under the Act requires organizations to develop investment policies that maximized interest and dividends in order to generate the most distributable income each year. This may not be the best investment policy to have long-term growth of the endowment funds. All organizations should evaluate current Pennsylvania law as it relates to their endowment funds and determine what is in the best interest of the organization both in the short and long term. To learn more about the Act, please attend our upcoming Act 141 seminar on Tuesday, January 26. Information is available on www.malinbergquist.com/act141.

Financial AdviserEDITORIAL > by Vincent F. Halupczynski

Why Nonprofit Organizations Need to Closely Monitor Endowment Income Distributions Under State Law


It’s been almost 50 years since the first clients of Stairways Behavioral Health attended support meetings in a second floor room above the former Nobil Shoe Store at 8th and State Street in downtown Erie, Pennsylvania.

Coined “Stairways,” for the steep set of stairs they had to climb, the program represented much more for those living and coping with mental illness – it essentially symbolized stepping up to a better life.

“The flight of stairs is a metaphor for all of our lives, having nothing to do with a disability or disease,” explains long-time Stairways President and CEO Bill McCarthy. “It is taking one step at a time and understanding that life is a series of efforts – there are no easy shortcuts. The staircase is also a metaphor for rebuilding. It’s true for all of us, and it’s certainly true for people who have had an interruption. Eventually you get back on the staircase, and going up suggests improvement – that with each step you’re getting closer to your goal.”

McCarthy, who has been with the private, nonprofit organization for nearly 36 years, has been there almost every step of the way as Stairways has progressed from that small outreach program in the 1960s to one of the area’s largest employers with nearly 500 employees, hundreds of volunteers, and over 8,500 clients. Stairways’ mission is straightforward: to assist those with mental health-care needs at any stage of life by providing comprehensive rehabilitation, treatment and supports essential for living, working, learning and participating fully in the community.

“The essence of Stairways is really honoring the human condition,” notes McCarthy. “It means seeing men, women or children for the people they are, not for the disease they might have. None of us likes to be seen through the lens of a disability or through the lens of a disease or an illness. We all want to be seen for the person we are.”

“If you start with the premise that your mission is to work with the whole person, then you by necessity have to look at what people want,” he continues. “And what people want is universal. People want jobs; they want to be loved; they want to love; they want to be independent or interdependent – returning to a sense of meaning and purpose.”

A New BeginningThere was a time not so long ago, however, when there were no real resources for those living with mental illness. Patients who for years were sent to state hospitals for the mentally ill returned to their communities without any place to go, or resources for help.

As part of a growing national movement, The Erie Chapter of the National Council of Jewish Women decided to take on the challenge of assisting these people with their transition. The chapter took up the initiative led by founder

Rachel Zacks-Gage and later project leader Laura Wallerstein along with 20 additional council members.

McCarthy, who was a childhood friend of the late founder’s son, remembers hearing Zacks-Gage making plans to organize Stairways while talking on her kitchen phone. He never dreamed that he would one day work at the organization, officially founded by Zacks-Gage and that small group of volunteers 1961.

After studying archaeology and anthropology at the University of Delaware and Gannon University, McCarthy took a full-time job at The Sarah Reed Children’s Center, which profoundly influenced his decision to pursue a career in social work. Several years later, he came to Stairways, planning to stay for a year or two – never imagining that he would be with the organization three decades later.

“I fell in love with this place largely because of its humanness,” notes McCarthy. “It’s such an imperfect, wonderful, messy, creative workplace that reminds me of the essence of humanity. All the good and all the bad you can find in the human experience, you can find here.”

As a case manager, McCarthy worked with a small team of colleagues to assist clients being discharged from the state hospital, located 70 miles away in North Warren, Pennsylvania. It was a time when the United States embraced an asylum model for treating thousands of men, women and children with mental illness – a dramatically different picture than it is today.

“You could live in a state hospital for 20, 30, 40, 50 years and then they would say, ‘You’re being discharged back to your community; here’s a bus ticket,’ and you would come home,” says McCarthy. “From there, you would walk to the YMCA. You had no contacts, no assistance. You just showed up.”

Stairways founders believed that there was a far better way for these individuals to return to their communities. Many of those clients, who had been institutionalized for so long, had never cooked a meal, never used a telephone, or, for that matter, voted.

In those days, Stairways provided numerous residential programs to assist clients with their transition into a community setting, with 24-hour supervision. Then, around that experience, the health-care

Stepping Up to a Better Way of Life for Nearly 50 Years

Bill McCarthy,president and CEO


organization added departments – a socialization department, to help people develop friendships; an employment department, to help people get work; and an education department, to help people study for and graduate from high school or obtain a GED.As the organization and its clients’ needs evolved, residential programs shifted to a community based model in which programs and other services became á la carte.

“The nice thing about that is we can begin to pull away when you no longer need us,” explains McCarthy. “If you need us again, we can provide more support.”

Adolescents and the AgingAt Stairways, the need for support can come at any age.

The organization recently established the Stairways Mobile Adolescent Recovery Team (SMART program), a one-on-one therapeutic program to help youth – ages 12 to 21, who are enrolled or in the process of enrolling in a middle school or high school – acquire the skills and tools that will help them advance through the developmental stages of adolescence and successfully transition into adulthood.

“There are a lot of children who don’t have the good fortune of being raised in a family that’s intact and healthy and happy, or may be in a neighborhood that is not safe, maybe not having the genetic predisposition to good health,” explains McCarthy. “We think these kids are at risk, and we think we can provide real, meaningful help for them.”

Stairways also recognizes the importance of reaching college students who face psychiatric conditions while at school and is in the process of talking with area universities to partner and provide additional resources. “Oftentimes,” adds McCarthy, “it’s an issue of panic attacks or depression, some kind of mood disorder, and we really believe that if we can partner with the schools to reach students early on, we can make a difference.”

It’s through such partnerships that Stairways has been able to assist senior citizens coping with mental illness. McCarthy, who is on the Board of Directors at Millcreek Community Hospital, says all psychiatric residents, who are training to become psychiatrists, work at Stairways’ outpatient facility. Stairways is also very involved with the development of the psychiatric residency program and curricula at LECOM (the Lake Erie College of Osteopathic Medicine) and working with the hospital, its facilities and services, including its geropsychology unit.

“So we see both ends of the spectrum,” notes McCarthy, “to help people remain as independent as possible.” >

Stairways Behavioral Health Celebrates Legacy of Mental WellnessIn 1959, the mental health community across the United States was on the verge of deinstitutionalization. That year alone, Warren State Hospital in North Warren, Pennsylvania, discharged 298 patients recovering from mental illness to set up residence in their home community of Erie County. Many of those individuals lacked self-care and social skills and knew little about life outside of the hospital.In response, the Erie Chapter of the National Council of Jewish Women mobilized and trained 22 volunteers to launch “Operation Friendship,” offering opportunity for individuals to develop skills and confidence in readjusting to community living. On April 6, 1961, “Stairways” – renamed for the staircase clients walked up to arrive at the social rehabilitation center and toward a new life – opened in downtown Erie, Pennsylvania.Today, Stairways Behavioral Health is the most progressive mental health-care provider in Erie and Crawford counties and serves over 8,500 people annually, employs nearly 500 full- and part-time mental health professionals and is funded by Erie and Crawford Counties, countless donors and local and national partners.The conviction of the founders remains at the heart of Stairways’ mission 50 years later: Stairways assists persons with mental health-care needs at any stage of life in their recovery by providing comprehensive rehabilitation, treatment and supports essential for living, working, learning and participating fully in the community.These faithful volunteers began the mission of Stairways Behavioral

Health in 1961, which is to assist those with mental health disorders to live, work, learn and participate fully in their community. Co-chairs Rachel Zacks-Gage and Laura Wallerstein are standing, second and fifth from the left, respectively.

In the early days, clients would climb a steep set of stairs to their meeting location in downtown Erie. The program became known as “Stairways” not simply because of these stairs, but because it represented stepping up to a better way of life.


Stairways Behavioral HealthFounded: 1961

About: Stairways is a private, nonprofit organization comprised of a network of professionals who help people return to good health after episodes of behavioral or emotional issues.

Clients: Children and adults in Erie and Crawford counties. The health-care organization also sees clients who come from neighboring New York and Ohio.

Office Locations: Erie County-Main Office 2185 West 8th Street Erie, PA 16505 Phone: 814/453-5806 Toll-free: 1-888-453-5806 Crawford County Outpatient Services 16332 Conneaut Lake Road Meadville, PA 16335 Phone: 814/337-8762

Web site: www.stairwaysbh.org

Stairways’ staff, clients and Board of Directors embrace the practice of servant leadership in steering the direction of the agency and its services. Among those dedicated Board members are: Bottom row, from left: Andrea Hoffman, MSN,CNA; Peter Boice; Cecile Armor; Harold Simmons III, Chair; Phillip H. Zacks; and Rita Goebel. Top row, from left: R. Anthony Snow, M.D.; James P. Renshaw, Immediate Past-Chair; William F. McCarthy, President; William Kennedy; Clayton Lindemuth, D.O.; and Charles W. Schaaf. Not pictured: Ellen Callahan, Vice-Chair; Wayne Koble, Treasurer; David Armor, David Holland, Esq; and Kristine Nelson, D.O.

Opportunities UnlimitedOffering programs and services to enable people with disabilities to maximize their independence is one of the reasons Stairways first began offering vocational training and employment opportunities. In fact, Stairways board members helped to start a new corporation, Opportunities Unlimited of Erie, to help the disabled return to work.

“Work defines, for so many of us, the adult experience,” notes McCarthy. “When you’re sidelined as the result of a disability, not just a psychiatric one, and you’re cut out of the workplace, you are cut out of a lot.”

Opportunities Unlimited clients receive training in interpersonal skills, assistance in workplace dynamics and help in securing employment opportunities by working with more than 40 area employers. Among those businesses and organizations are the Department of Labor and Industry, Engineered Plastics, MTR Gaming, Northwest Savings Bank, PennDOT, Saint Vincent Health System, VA Medical Center, YMCA, and, of course, Stairways’ own service locations.

“It has been wildly successful and I see that as a huge promise for things to come,” notes McCarthy. “I also think that Opportunities Unlimited will increasingly become known as the place to go if you want to return to work and you have some type of disability that is holding you back.”

Stairways itself is a prime example of the empowerment that can come from being in a positive and engaging work environment. The organization often

hires clients who become some of their best employees, and recently was recognized as No. 15 among the Best Places to Work in PA in 2009 – the fourth time Stairways has received the award since 2005.

“We hear from our staff that we invest in them; we do a lot of professional development; and spend a lot of money on training,” adds McCarthy. “Services are the absolute key for what we do for a living, and so we constantly need to be upgrading our ability to serve and serve well. The other thing that people tell us is that we keep an eye toward the future.”

The organization’s strategic plan is a team effort, based on input from staff, clients and family members. A critical component of that plan has been to develop a campus model.

Today, Stairways’ State Street campus is primarily used for various outpatient treatment, while the majority of the organization’s administrative staff is housed at the 8th and Pittsburgh location. The former Curtze mansion at East 26th Street and Holland is the new location for the Stairways Center for Arts and Humanities and also the Stairways Education Center, for adults who want to gain computer skills, reading comprehension or technical skills to become more employable.

According to McCarthy, the arts represent a creative outlet and employment for many Stairways clients. Recently, nationally recognized artist Lee Steadman, director of the Stairways Behavioral Health Center for Arts and Humanities, organized, for the second year in a row, an art show in the Capitol Rotunda in Harrisburg, showcasing works by artists with disabilities from all over the state.

“We have clients who come to Stairways who, in fact, sell their works for a handsome price and are really able to support themselves in the arts,” notes McCarthy. “So we’re dedicating the entire (East 26th Street) building and all the grounds toward enhancing the arts and education.”

Steps Toward the FutureWhen McCarthy pictures the future, he talks about a day when disorders of the brain are viewed the same way someone would consider pneumonia or glaucoma or asthma. He speaks about acceptance and education, and how one in four Americans will be affected by a mental health disorder in their lifetime.

“In a speech I gave some years ago, I talked about 9/11 and how the firefighters and police officers rushed into the building to help, and within a few minutes, they themselves were the ones in need of help,” he says. “We simply take turns in society of giving and receiving.”

Gradually, through ubiquitous partnerships with area hospitals and medical centers, McCarthy also envisions an integrated approach to medicine where mental health-care services will be available everywhere.

“If you go to a family doctor and you need a mental health service, maybe we’re in that doctor’s office,” says McCarthy. “If you’re a student and you are feeling hopeless, then maybe we’re in your school.”

At Stairways, it’s taking another step in the journey, which was started by a small group of stewards so many years ago.

“Who would have imagined that a couple of people starting off in their kitchen with a good idea would produce an organization that serves over 8,500, employs almost 500, and has become one of the Best Places to Work in PA?” says McCarthy. “Almost 50 years later, we own none of this. Stairways is a true community asset, a community treasure.” For more information about Stairways, visit www.stairwaysbh.org.

“In a speech I gave some years ago, I talked about 9/11 and how the firefighters and police officers rushed into the building to help, and within a few minutes, they themselves were the ones in need of help. We simply take turns in society of giving and receiving.” — Bill McCarthy


Stairways Behavioral HealthFounded: 1961

About: Stairways is a private, nonprofit organization comprised of a network of professionals who help people return to good health after episodes of behavioral or emotional issues.

Clients: Children and adults in Erie and Crawford counties. The health-care organization also sees clients who come from neighboring New York and Ohio.

Office Locations: Erie County-Main Office 2185 West 8th Street Erie, PA 16505 Phone: 814/453-5806 Toll-free: 1-888-453-5806 Crawford County Outpatient Services 16332 Conneaut Lake Road Meadville, PA 16335 Phone: 814/337-8762

Web site: www.stairwaysbh.org

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DEPARTMENTS > Contact: John OnoratoHR ConnectionORDER YOUR MANDATORY FEDERAL LABOR LAW POSTER The employment-related provisions of the Genetic Information Non-Discrimination Act of 2008 (GINA) became effective November 21, 2009. Title II of GINA prohibits the use of genetic information in employment and the intentional acquisition of genetic information about applicants and employees. Genetic information includes information about an individual’s genetic tests, genetic tests of a family member, and family medical history, according to the Equal Employment Opportunity Commission (EEOC).In addition to prohibiting employers from requesting or requiring individuals to undergo genetic testing, GINA has confidentiality requirements for any genetic information that an employer lawfully possesses.The law requires employers to post a notice with GINA information. To order your mandatory updated federal

labor law poster, go to www.mbausa.org/human-resources/federal-labor-law-poster/ or call the Manufacturer & Business Association at 814/833-3200 or 800/815-2660.

EMPLOYEE MORALE LOW, SURVEY SAYSNearly a quarter of U.S. employers believe that their current employee

morale is low as the ripple effects of the economic downturn — longer working hours and higher stress levels — still persist, a survey says. The report, conducted by Harris Interactive on behalf of CareerBuilder.com, also revealed that nearly a quarter (23 percent) of the employees surveyed, rate their organization’s current employee morale as low.

The 2010 Insurance Bulletins, which contain the underwriting, processing instructions and plan designs for all the health insurance products offered as a value-added service to Manufacturer & Business Association member companies, are now available on the Association’s Web site, www.mbausa.org. Simply click on the Insurance Services button to access the latest forms. If you have any questions or concerns, please contact me at 800/815-2660, 814/833-3200 or [email protected].

Patty Smith is the director of Employee Benefit Services at the Manufacturer & Business Association.

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Sheila Sterrett is the director of Government Affairs at the Manufacturer & Business Association.

OntheHill DEPARTMENTS > Contact: Sheila Sterrett

Who can contribute to a PAC?Members of an organization may contribute to a PAC, with all contributions being personal and not corporate. Are PAC contributions tax deductible? No. Political contributions are not tax deductible as charitable contributions for federal income taxes.But don’t PACs just buy votes in elections? While no single PAC can sway an election, it can make certain that voters hear a clear, concise message from a specific sector of the community. Money given to campaigns is used to speak, educate and try to persuade voters to vote for or against a candidate. At the same time, other qualities and attributes such as speaking ability, marketing, popular political positions, access to the press, etc., also serve as useful political influencers. Doesn’t campaign money buy votes in the Legislature? No, because the primary influences in voting behavior include ideology, political affiliation, party agenda, and a legislator’s perception of public opinion. Interested in learning more about political action committees? Please visit www.fec.gov and www.dos.state.pa.us to learn more, or call me at 814/833-3200, 800/815-2660 or e-mail [email protected].

A product of the original campaign finance reform of the 1970s, a political action committee (PAC) brings political contributions out of the dark, avoiding the abuses of Watergate – large amounts of unlimited and undisclosed funds toward campaigns. PACs instead allow the public to view extensive and detailed reports that are filed annually with the Federal Election Commission (FEC) and the Pennsylvania Department of State. Any citizen can view the contributions that are made by accessing public records available on www.fec.gov and www.dos.state.pa.us.What is MBA-PAC?MBA-PAC is the Manufacturer & Business Association’s bipartisan political action committee. Serving as a vehicle for a united voice in the political process, the MBA-PAC supports those candidates who demonstrate a steadfast commitment to improving the business climate through a pro-business, pro-growth agenda on issues such as health care, energy and taxes.While the MBA is headquartered in Erie with offices in Harrisburg and Williamsport, Pennsylvania, the PAC allows the MBA to become a key player in the political process on both the state and federal levels. The business community cannot sit back and let legislators dictate how manufacturers and business owners conduct operations on a day-to-day basis. Rather, they must be actively engaged. The MBA-PAC does just that, giving members of the MBA a voice in the decision-making process. Why does the MBA have a PAC?The Association’s Government Affairs Department holds a powerful influence in Harrisburg and Washington. With three registered lobbyists on staff, the MBA’s 4,700 member companies rely heavily on its efforts to represent their interests on critical business issues. Federal election campaign laws, however, prohibit trade associations from using their general treasury funds to make contributions to elections. Only through a PAC, like the MBA-PAC, can we financially support candidates who demonstrate a commitment to accelerating our recovery, spurring economic growth and creating a pro-business environment.

MBA-PAC: A United Voice in the Political Process

“A government that is big enough to give you all you want is big enough to take it all away.”

– Barry Goldwater, former U.S. Senator


CAN I REQUIRE EMPLOYEES TO TEMPORARILY TRANSFER TO AVAILABLE ALTERNATIVE POSITIONS WHEN THEY RE-QUEST FORESEEABLE FAM-ILY AND MEDICAL LEVEL ACT (FMLA) INTERMITTENT LEAVE OR FMLA LEAVE ON A REDUCED SCHEDULE?If employees request foreseeable intermittent leave or leave on a reduced schedule, you may require them to temporarily transfer to available alternative positions for which they are qualified, and which have equivalent pay and benefits (no need for equivalent duties) that better accommodate recurring periods of leave.

I HAVE TWO MARRIED EMPLOY-EES THAT HAVE REQUESTED

FMLA LEAVE FOR THE BIRTH OF THEIR CHILD. DO I HAVE TO ALLOW BOTH OF THEM THE LEAVE?If you employ a husband and wife who are both entitled to leave for birth or placement, you may limit them to a combined total of 12 workweeks for such leave.

I HAVE AN EMPLOYEE ON IN-TERMITTENT LEAVE UNDER THE FMLA. CAN I LIMIT THEIR LEAVE INCREMENTS TO BE TAKEN IN HALF DAYS? Under FMLA, you may only limit intermittent leave increments to the shortest period of time used to account for other absences, provided it is not greater than one hour.

I AM AN EMPLOYER COVERED BY FMLA, AND I HAVE AN EM-PLOYEE HANDBOOK. DO I HAVE TO INCLUDE FMLA INFORMA-TION IN MY HANDBOOK, OR CAN I JUST POST THE INFORMA-TION IN THE EMPLOYEE BREAK ROOM?Covered employers must post a notice explaining FMLA to employees and applicants, and also must include information regarding FMLA in employee handbooks that contains at least as much information as the poster. If the employer does not have a handbook, then it must distribute a copy of FMLA notice to all employees upon hire.

Legal Q&A

The Erie Community Foundation and The Nonprofi t Partnership

www.TheNonprofi tPartnership.orgwww.ErieCommunityFoundation.org

planting the seedsWe work together to support nonprofi t

organizations in our community.Now more than ever, local nonprofi ts need you. Become involved. Learn more.

It’s really quite simple, and all we need is a seed.


DEPARTMENTS > Contact: John Onorato

In 2008, Congress amended the Family and Medical Leave Act (FMLA) to: 1) allow eligible family members of service members in the National Guard and Reserves to take leave for a qualifying exigency related to the call to active duty of the service member, and 2) allow eligible family members to take up to 26 weeks of leave to care for a member of the regular Armed Forces, National Guard or Reserves with a “serious injury or illness” incurred in the line of duty on active duty. On October 28, 2009, President Obama signed the National Defense Authorization Act for Fiscal Year 2010 (the “NDAA”), which expands the scope of those FMLA military leave provisions. Specifically, the NDAA, also now permits family members of regular

Armed Forces service members deployed to a foreign country, as well as members of a reserve component of the Armed Forces deployed to a foreign country, to take leave for a qualifying exigency. As stated above, only family members of National Guard and Reservists called to active duty previously were permitted to take leave for a qualifying exigency. The NDAA also expands the scope of military caregiver leave to families of certain veterans, who were not covered by the provision. It also permits military caregiver leave for serious injuries or illnesses that are the result of pre-existing conditions that were aggravated by service while on active duty.Employers covered by the FMLA should make certain that their

FMLA policies and procedures are in compliance with the new provisions, which took effect immediately. For more information about FMLA military leave, contact the Association’s HR & Legal Services Division at 814/833-3200, 800/815-2660 or [email protected].

FMLA Military Leave Law Expanded

Tammy Lamary is Labor & Employment Counsel for the Manufacturer & Business Association’s Legal Services Division. She assists member companies with their legal needs, including hotline calls, contract drafting and negotiation, employee handbook review and drafting, and selective litigation.

Now you can scan and send check images from your of! ce or storefront to your checking account 24 hours a day, seven days a week.

*All services listed are offered free of charge until June 30, 2010. **Up to 300 combined debits, credits, and deposited items each month. ***See bank for details. †Not FDIC Insured. May lose value. No bank guarantee.

FREE Business Checking**

Business Checks***

Northwest Check Cards with GO! Rewards

FREE Investment Sweep Account†

FREE Cash Management Tools

Express Deposit (Remote Capture)

ACH Direct Deposit and Direct Debit

Online Banking and Bill Pay

FREE eStatementsPLUS

Express Deposit: It’s like having one of our of! ces in your of! ce.

20 Erie County locations to serve you in Erie, Corry, Edinboro, Fairview, Lake City,

North East, Union City, and Wattsburg.Northwest Direct: 1-877-672-5678 www.northwestsavingsbank.com

Enjoy Express Deposit as part of our FREE Business Stimulus Package!*

*All services listed are offered free of charge until June 30, 2010. *All services listed are offered free of charge until June 30, 2010. **Up to 300 combined debits, credits, and deposited items each month. **Up to 300 combined debits, credits, and deposited items each month. ***See bank for details. †Not FDIC Insured. May lose value. No bank guarantee.

Business Stimulus Package!*

Member FDIC

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M a c D o n a l d I l l i g J o n e s & B r i t t o n L L P

100 State Street Suite Erie, P MacDonaldIllig.co 0

Achievement Center Africa 6000American Cancer Society Relay for LifeArtsErieAsbury Woods PartnershipAttorneys & Kids Together Mentor ProgramCathedral Preparatory SchoolCatholic Charities of the Diocese of ErieCommunity Country Day SchoolCommunity of CaringDr. Gertrude A. Barber National InstituteEarly ConnectionsEmmaus Soup KitchenErie Community FoundationErie Community Shelter Services

Commitment to community is a core value embodied by the attorneys and sta! of MacDonald Illig. "rough our donations of time and #nancial assistance, we strive to enrich the lives of our neighbors in Erie

and throughout northwestern Pennsylvania.

Commitment to Community

Greater Erie Chapter of the American Red CrossHamot Medical Center

Hooked on Books Volunteer Reading ProgramHouse of Healing

Housing and Neighborhood Development Service (HANDS)Humane Society of Nortwestern PA

JazzErieJohn Kanzius Cancer Research Foundation

L'Arche of ErieLake Erie Research Institute

Luther Memorial Learning CenterMercy Center on Aging

Mercyhurst Preparatory High SchoolMinority Health Education Delivery System (MHEDS)

National Multiple Sclerosis SocietyNorth East Community Foundation

Northwestern Legal ServicesPerseus House

Rethink ErieSarah A. Reed Children's Center

Stairways Behavioral HealthSupportive Living Services

!e Ophelia ProjectUnited Way of Erie County

Villa Maria AcademyVilla Maria Elementary

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Erie County Bar FoundationErie Day SchoolErie Homes for Children and AdultsErie PhilharmonicErie PlayhouseErie Regional Chamber and Growth PartnershipFlagship Niagara LeagueGreater Erie Community Action Committee (GECAC)Greater Erie Area Habitat for HumanityGreater Erie Area YMCA

Some of the nonpro"t organizations we serve include:

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The EEA-PA is providing member companies with low-cost electricity solutions in those areas where rate caps have come off or are soon to come off. Which areas are currently being impacted?The major areas being affected are in the middle of the state, where rate caps are being removed in the PPL territory this month. As a result of the expected 30-percent increase in electricity prices, there is much interest in the EEA-PA program. The same is true in the Pittsburgh area, where rates were removed in 2009. In northwest Pennsylvania (Penelec territory), rate caps are not being removed until January 2011. Businesses are just beginning to understand the coming impact.What types of companies or energy users can benefit from EEA-PA?All companies can benefit from EEA-PA’s energy supply. The EEA-PA business model is a wholesale purchase passed through to the end customer with only a small (less than 2 percent) administrative fee. This model works because EEA-PA is licensed and regulated to purchase directly from the electric grid. In essence, our members are purchasing energy at the same discounted price as the largest electricity users.What differentiates the EEA-PA from other energy suppliers?The biggest difference is the ability to purchase directly from the electric grid. However, EEA-PA can supply electricity in any way the member customer desires. Some want the lowest possible cost, which can be achieved by purchasing on the day-ahead market (DAM). Some larger users will fix a block of energy for a year to assure a budget is met. For other customers, budget certainty is not as critical, so a portion of the load will be fixed and a portion will be purchased on the DAM. EEA-PA can handle all of these member requests.Who are some of your customers and what type of energy savings have they seen?EEA-PA customers range from very large users of electricity (over 30 MkWh/year) to small and medium-size office buildings, industrial and manufacturing facilities, as well as churches and nonprofits, etc. EEA-PA is the perfect solution for any nonresidential service location.Why did they choose EEA-PA?Most choose EEA-PA due to the simplicity of the program. It allows all members to purchase directly from the electricity grid, pay only the wholesale cost, plus an administrative fee of less than 2 percent. There is no markup or margin on the energy; it is passed through at cost.What is the typical energy savings for an EEA-PA customer and how soon will they see these savings?Typical savings are upwards of 22 percent to 27 percent over PPL rates. For those in the PPL territory, a simple savings calculation is available on the MBA Web site, www.mbausa.org. All that is needed to calculate an estimate of your savings is your current PPL bill. How do you join the EEA-PA?To join EEA-PA, you must go through a simple application process. These forms include an MBA membership application, if you are not already an MBA member, billing history and/or payment release form, and a credit application. All these forms are available by clicking on the EEA-PA button on www.mbausa.org. For more information about the Employers’ Energy Alliance of Pennsylvania, Inc., contact J. David Bell at 814/833-3200, 800/815-2660 or [email protected].

J. David Bell is the president of the Employers’ Energy Alliance of Pennsylvania, Inc. (EEA-PA), a wholesale, low-cost energy supplier.

Energy Efficiency and Conservation Information for Your Business

Contributed by PUC Spokeswoman Jennifer Kocher

Act 129 of 2008 provides Pennsylvania businesses opportunities to take energy efficiency and conservation to the next level. The General Assembly enacted Act 129 to require Pennsylvania’s seven largest electric distribution companies (EDCs) to develop energy efficiency and conservation plans (EE&C) and adopt other methods of reducing the amount of electricity consumed by customers.

The Pennsylvania Public Utility Commission (PUC) is implementing Act 129 and guiding businesses toward achieving the legislation’s overall goals of reducing energy consumption and peak demand. Businesses will receive specific information from their EDC on the money-saving EE&C programs available to them because of Act 129. These programs are designed to help consumers use electricity efficiently, curb consumption and reduce overall demand for electricity. Many of these programs include subsidies from the EDC to encourage the use and employment of the energy efficiency measures. Businesses are encouraged to contact their energy supplier for more information.

Energy


170 YEARS... CMI-EPTI LLC, Pleasant Ridge Manor 160 YEARS... Erie Cemetery Association 150 YEARS... Hannahstown Mutual Insurance Co., Herbol Insurance Agency Inc. 140 YEARS... East Brady Lumber Company Inc. 130 YEARS... Globe Printing Company, Inc., Greg Borland Memorials, Hamot Medical Center 120 YEARS... Knights of St. John Bldg. Association 110 YEARS... Farmers National Bank of Emlenton, Galbraith’s R & D Furniture Company, Hess & Fisher Engineers Inc., Manufacturer’s Assn. of Jamestown Area, Reinsel Funeral Home, Scobell Company Inc., SECO/WARWICK Corporation, St. Charles Refractories, Staiman Recycling Corporation, The Mars National Bank, Warren General Hospital, Zurn Industries, Inc.

100 YEARS... Blair LLC, Ellwood City Forge, Guy E. Allen & Sons 90 YEARS... American Legion Post 159, Amthor Steel, Inc., Ervin Industries, Inc., Family Services of Warren County, Inc., He!ner Brothers, Kuntz Motor Company, Mahoning Hardware & Implement Company, O’Leary Dental Group, Titan Tool Co., Inc., Watson Memorial Home, West Milton State Bank 80 YEARS... Bliley Technologies Inc., Cook Riverside Cabins, Hedlund Glass/Auto Seat Cover Company, JLW Ventures Inc., Kovalchick Corp., Loutzenhiser-Jordan Funeral Home, Platt’s Mill, Walker Chevrolet, Inc., Williams Insurance & Travel 75 YEARS... Dale Woodard Law Firm, Durst Trucking Company, Erie City Memorials, Hanson’s Freezer Meats, Montgomery’s Hardware Inc., Snap-tite Inc., Wagner’s Wheel Alinement Inc.. 70 YEARS... Clarion Onized Federal Credit Union, Galaxy Federal Credit Union, Interlectric Corporation, John V. Schultz Company Inc., Redinger Realty, Inc., Roy B. Constable Stores Inc., WACOPSE Federal Credit Union, Zacherl Motor Truck Sales Inc.

60 YEARS... A.J. Meyers & Sons, Inc., Asel’s Cabinet Company, B & L Wholesale Supply, Inc., Berkey’s Nursery, Bielak Farm, C.A. Elliott Lumber Company Inc., CMSJLP, LLC, Coldwell Banker Bainbridge Kaufman, Culligan Water Conditioning, Forsyth Drilling Inc., Fugh Refrigeration, Inc., Grand Valley Manufacturing Company, Hagan Business Machines, Inc., Hoeganaes Corporation, Les Crago, Jeweler, Inc., Lloyd-Johnson, Inc., Mark Murphy Real Estate, Ras Auto Body, Inc., Robertson Kitchens/Remodeling Serv.-Erie, Seifert’s Furniture, Sherry Distributors Inc., St. Marys Precision Homes, The Clinton Press Inc., Trucco Agency Inc., Vertical Seal Company, Vocational & Psychological Services, Volt Services Group, W. M. Aiken & Son, Wesex Corporation, Wilkinson Dunn Co., Williams Dental Laboratory Inc., Zahm & Matson Inc., Zip Power Parts Inc. 50 YEARS... ArtsErie, Barnhart & Sons Inc., Chester D. Zaleski, M.D., Clarion County Broadcasting Corporation, Conley Resort, Crawford County Dairy Herd Improvement, Cross Creek Resort, Inc., DeMans Inc., Edinboro Upholstery Inc., Emerson Electric Supply Company, Fairview Township Water & Sewer Auth., Garnon Truck Equipment, Inc., Glenwood Beer Distributors Inc., Gospel Hill Golf Club, Hofmann’s Church & Religious Goods, Hovis Auto Supply, Joe’s Tux Shop, John J. Kalata, D.O., Family Practice, Johnson’s Keystone Service, Kaufer Associates Inc., Lowry Auto Body Inc., Mike Picardo Farms, Northwestern Roo"ng Company Inc., Otteni Builders, Penn Tech Federal Credit Union, R. Hunter Inc., R. Rindfuss Drilling, L.P., RAM Electric Inc., Richter Farms, Right Woods Home Repairs Inc., Sealed Air Corp./Food Packaging Division, Sesler Inc., Suburban Building Center Inc., Szewczyk & Sons Plumbing, Heating & AC, The Boot Box, Wells Fargo Insurance Services of Pa., Williams’ Decorating Center 40 YEARS... 3-H Abrasive Company, Action Printing & Business Forms Inc., Advanced Finishing USA, Altmeyer’s Trailer Sales Inc., Arrowhead Wine Cellars Inc., B & H Tire Service, Bair’s Inc., Bowser Tire & Auto Inc., Burleson Feed Store Inc., Chalpka Concrete Construction, Chet’s Custom Paint, Chivers Construction Co., Inc., Conneaut School District, Corry Micronics, Inc., Coynes Auto Center, EPM Corporation, Foam Fabricators Inc., Friedhaber’s, Glenn Peterson Floors & Furniture Inc., Grove Manor, Heath Oil, Inc., Howard G. Moyer Inc., Hugh J. Schultz, Jim’s Sports Center, Inc., Joden Jewelers, Kahle’s Kitchens, KM Sanford Co. Inc., Lamjen, Inc., Lost Acres Farm, Mountain Laurel Federal Credit Union, Nesmith Insurance Agency, LLC, Paragon Packaging Products Inc., Parker Brothers Well Drilling, Inc., Quality Dispersions, Inc., Ralph S. Alberts Co. Inc., Richard Robbins, D.C., Robert C. Anderson, Ross Notary Service, Seigworth Road Supply, Shingledecker’s Welding, Inc., Skinner Pontiac Buick GMC, Smith, Bertocchi, Arbaugh & Hall, P.C., Son’s of Four Dairy, The DJB Group, Thomas R. Wilks, D.M.D., Turner Enterprises, Vision Electrical Inc., Warren Overhead Door, Williamsport Dies & Cut, Willie’s Smoke House

Happy Anniversary!

Blue Ocean Strategy CenterBlue Ocean Strategy Center

20 < www.mbausa.org < January 2010 20 < www.mbausa.org < January 2010

Congratulations to the more than 460 member companies celebrating milestone anniversaries in 2010. Most businesses fail in the first three years of existence, but you are survivors. Your longevity not only speaks volumes about your growth and success but also your contributions to shaping the many industries — manufacturing, health care, financial, retail and others — operating right here in northwest and central Pennsylvania. As the backbone of our economy, thank you for all you do to drive progress and innovation in our region during these most challenging economic times. Your determina-tion and skill, not government intervention, will help lead our economy out of its present slump. We wish you continued success in your operations now and in the future.

-Mark Kulyk, Chairman, Manufacturer & Business Association Board of Governors

30 YEARS... Air/Tak Inc., Allegheny Forestry Inc., Allegheny Tool & Mfg. Co. Inc., Atlas Pressed Metals, Beck Tool Inc., Bob Ferrando Lincoln Mercury Sales, Inc., Boyce Fruit Farm, Bryan China Company, Burton Funeral Home Inc., C U Nation Inc., Campbell Studios Inc., Chemtech Oil"eld Chemicals, Chipsco Inc., Chipsco Precision Services LLC, Country Mountain Amusements Inc., D & L Radiator, Dave’s Country Meats Inc., Deniziak Siding Inc., Dundon Accounting, Family Optical Center, Forest County Wood Products, Forest Park Enterprises Inc., Fortune Electric Co., Ltd., G. W. Becker, Inc., Gohrs Printing Service Inc., Grantham’s Landing Restaurant, H & H Machined Products Co., H. J. Finck Inc., H. Jack Langer Inc., Herbstritt Sons, Hospice of Metropolitan Erie, Hrenko Insurance Agency, Inc., Integrated Fabrication & Machine Inc., Ithen Printing Services, Jim’s Appliance Commercial Repair, John M. Bracken Building Contractor, John Manganello and T. L. Bost, D.M.D.’s, Joseph F. DellAntonio, Inc., Kendzior Orthodontics, Kern Auto Parts Inc., Keystone Research Corporation, KOA Speer Electronics, Inc., L. E. Nelson Company, Lampman Claim Service, Inc., Laser Tool Inc., Lawrence C. Scully DMD, Longo Plumbing & Heating Company, Long’s Auto Body, Inc., McKean Abstracting Company, Mealy Excavating & Construction Inc., Mid-State Amusement Company, Inc., Mumford Logging, Nichol Dairy Inc., Output Sales Corporation, Penn Ohio Rehabilitation PC, PIP Printing, Pope and Drayer, Pure Tech Inc., R. Kibbee Distributing Inc., Raven Rental, Richards & Associates P.C., Richlyn Manufacturing Inc., Rifaat R. Bassaly, MD, PC, Robert Frye Inc., Ronald M. Merski, DMD, Russo Heating & Cooling Inc., Sara’s Restaurant, Scokim Inc., Shockey Excavating Inc., The McCauley Trucking Co., Thomas Erie, Inc., Thomas Gander Farms, Tillman Art Studio Inc., Trinity Manufacturing Company, Inc., Universal Well Services Inc., Valesky’s, Inc., William B. Moore Law O#ce, Wind Haven Restaurant & Lounge Inc., Woodstock Mfg. Services Inc., Wright Masonry Contracting Inc. 25 YEARS... A Plus Mini Mart, Anesthesia Consultants, Anthony Colangelo, M.D., P.C., Atlantic Equipment Specialists Inc., Auto Lender Inc., B. J. Petruso Agency & Assoc. Inc., Bayfront Digestive Disease Associates, Bernard & Stuczynski, Bigusiak Trucking, Inc., Bonnell’s Collision Cente, Boyle Inc., Bu! Insurance Agency, Business Records Management Inc., Campbell Trucking Inc., Chico’s Travelers Inn Inc., CMC Organ Pipes, Community Health Net, Composi$ex Inc., Contemporary Opthalmology of Erie, Cornerstone Construction, Corrugated Specialties Inc., Craig’s Service, Creditron Financial Corporation, Custead’s Sawmill Inc., Dan Olesnevich Fabricating/Truck Repair, DeBlasio Group, Devonian Resources Inc., DuBois Emergency Medical Svc., Elk County Ammo & Arms, Ellwood Quality Steels Company, Ely & Smith, Empire Energy E & P, LLC., Form Tool & Mold Inc., Fralo Industries Inc., Franklin Industrial & Comm Dev Authority, Fribo Enterprises Inc., Fulton Forest Products & L & S Logging, Gene Davis Sales & Service, George A. Pegher Inc., Great Lakes Case & Cabinet, Hamilton Insurance Agency, Hand & Upper Body Rehabilitation Ctr., Harts Run Veterinary Hospital, Hepler General Contracting, Hoover Excavating & Trucking, Huber Blacktop Co., Hytech Tool & Design Company, Intech Metals Inc., Kaleida Machining Inc., Kellner’s Fireworks, Inc., Lake Real Estate, Lakeland Sand & Gravel, Inc., Leo’s Pneumatics & Hydraulics, Inc., Lignitech, Ltd., Local Motion Hair Design, Maha!ey Laboratory Ltd., Mark’s Tire Service, Inc. Mercer Forge Corporation,

Mike’s Bilo Supermarket, Mobile Medical Innovations, Inc., Montgomery Insurance Inc., Nelson Tire, Towing & Service, Inc., Nichols & Myers, Oesterling’s Concrete, Inc., Open Flow Gas Supply Corporation, Painter’s Auto Inc., Pediatric Dentistry of Erie, Pierce & Petersen Oil Company Inc., Precision Feedscrews Inc., Primo Distributors Inc., Production Abrasives, Inc., Quality Mold, Inc., Quality Steel Fabricators, R & W Truck Service Inc., Reynolds Building Systems, Inc., Rick Meabon Transport Corp., Ronald W. Helminski, D.M.D., S & H Knouse, Inc., Shoreline Construction Company, Inc., Slippery Rock Associates, Standard Precision Manufacturing, Tettis Plumbing & Heating, The Medicine Shoppe, The Pulmonary Rehab Center, Tri-Med Rehab Supply, United States Calibration Inc., Valley Piano & Organ, Inc., Venango Steel Inc., Vlahos Accounting, Inc., Waste Treatment Corporation, Wayne Deeter & Sons, William G. Dunagin M.D., William J. Madden, Esquire, P.C.

20 YEARS... American Health & Safety Inc., Andritz Inc., Armanini & Kolodychak LLP, AT & T Mobility, Atlantic Equipment Specialists Inc., Atwell & Perrine Excavating, Avocet Systems, Barry Johnson Forest Products, Inc., Bear Metallurgical Company, Bensur Creative Marketing Group, Boetger & Associates, Inc., Builders Support & Supply, Inc., CADD Edge, Inc., Cascade Auto Wrecking Inc., Chubon Insurance Agency, Cli! Kuhn Trucking, Corbin Electric Inc., Craig Psychological Assoc., Crown Commerce Corporation, Custom Arti"cial Limb & Brace Inc., Custom Machine Specialties, Czech Tool, DeLullo Trucking Corp., DJA Inspection Services Inc., DeLullo Trucking Corp., Dr. Mark R. Gammello, Drumheller Creative, Inc., Elk County Golf Association Inc., Erie Promotions & Expos Inc., ERS, Inc., Evergreen Contracting Inc., Ferraro Supply Co. Inc., Field’s Custom Slaughtering, Firetree LTD, Fox & Fox Inc., Garden’s Veterinary Hospital, Gary K’s Auto Sales, Inc., Generant Company, Inc., Gent, Gent & Snyder, Gerald D. Garcia, M.D., Goss Painting Inc., Greenscape Lawn & Garden Service Inc., Greenville Veterinary Clinic, James Communication Inc., Jane Theuerkauf Designs, Jane’s Stromboli Inc., Je!rey L. Ness Plumbing, Johnsons Tire Service, Inc., Joseph R. Kalik, D.O., Justine Marut Schober, M.D., Kevco Services Inc., KGM Industries, Kinzua Veterinary Clinic, Koldrock Water’s Inc., KVF Associates, Inc., Loper Dairy Farm, M & E Chloride, M. K. and Associates Inc., Mansell & Andrews, Marano’s Recreation & Sports Center, Marc Maslov, M.D., Mark J. Corey & Associates, MCG Rehabilitation Agency Inc., Means-Lauf Super Drug, MGM General Construction Corporation, Miller Overhead Door Company, MOL-DOK Inc., Multi Media Stripping Inc., Papa Advertising Inc., Perry Construction Group, Inc., PPG Script, Inc., Proforma - Bollheimer & Associates, Progressive Wood Working, Inc., Provider Resources, Inc., PSM Brown Co., RBJ Enterprises, Reno’s Trailer Sales Inc., Rhode Island Medical Services, P.C., River Road Auto Sales, Robbins Financial Advisory Service Inc., Robert F. Savolskis, CPA, Sam’s Club 6675, Seal’s Lumber Inc., Seelinger Services Inc., Springhill Senior Living, Stello Foods, Inc., Supreme Manufacturing Inc., T.C. Rogers, LLC, Trans 58, Unlimited Sta#ng Inc., Velocity Network, Vicary Insurance Agency, Vinco Inc., W & W Equipment, W. C. Rasely Resellers Inc., Watts and Pepicelli, P.C., Weber Painting, Inc., Weld-It Construction Co. , Wenco Castle, Inc./TROMI Inc., Whitehead Tool & Design, Inc., Wild Birds Unlimited, Woodlands Bank, Wood’s Dog House, World Resource Recovery Systems, Inc.

Anniversary information is based on member records as of October 2009. We regret any errors or omissions. Please contact the Manufacturer & Business Association with updated information for inclusion in future publications.


Hofmann’s Church & Religious Goods

Celebrating 50 Years!

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A Hand Up in Healing!

Specializing in Hand & Upper Body RehabilitationWork Site Evaluations, Ergonomics and Functional Capacity Evaluations

Physical & Occupational TherapyCustom Splinting

Certified Hand Therapists814.453.4743

Celebrating 25 successful years: 19852010

www.ErieHandCenter.com

Terri Wolfe, OTR/L, CHTOwner

$50 feeds up to 40 hungry men, women & children Please help today: Erie City Mission P.O. Box 407 Erie, PA 16512 (814) 4524421

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Food. Shelter. Hope. $50 feeds up to 40 hungry men, women & children Please help today: Erie City Mission P.O. Box 407 Erie, PA 16512 (814) 4524421

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Food. Shelter. Hope.

$50 feeds up to 40 hungry men, women & children Please help today: Erie City Mission P.O. Box 407 Erie, PA 16512 (814) 4524421

eriecitymission.org

Food. Shelter. Hope. $50 feeds up to 40 hungry men, women & children Please help today: Erie City Mission P.O. Box 407 Erie, PA 16512 (814) 4524421

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CELEBRATING

100 YEARSIN BUSINESS

GUY E. ALLEN.& SONS.

Party Tent Rentals

CRIME VICTIM CENTEROF ERIE COUNTY, INC.

Reducing the impact of crime through counseling, education and advocacy

Sexual Assault Toll Free Court Advocacy

(814) 455-9414 800-352-7273 (814) 455-9515

Serving victims since 1973

www.cvcerie.org

MACDONALD ILLIG JONES & BRITTON LLP WELCOMES NEW ASSOCIATESHeadquartered in Erie, MacDonald Illig Jones & Britton LLP, one of northwest Pennsylvania’s largest law firms, has announced the addition of Jenna Bickford and Craig Shamburg as associates with the firm.

Attorney Bickford graduated summa cum laude from Susquehanna University in 2006 with her bachelor’s degree in business administration. She received her Juris Doctor degree, cum laude, from the University of Pittsburgh School of Law in 2009. She concentrates her practice in Business Transactions, Real Estate, Government Services and Health Care.

Attorney Shamburg received his bachelor’s degree in accounting from the Pennsylvania State University,

University Park Campus, in 2005. In 2009, he graduated with honors from the University of Dayton School of Law. Attorney Shamburg concentrates his practice in the areas of Trusts and Estates, Tax and Business Transactions.

BRAND STRATEGIST JOINS PAPA ADVERTISINGLouis Filippo, a nationally known expert in brand identity and marketing, has joined PAPA Advertising, in Erie, as a brand strategist.

For more than 30 years, Filippo has worked directly with CEOs and marketing executives to develop strategically driven branding programs for businesses and institutions around

the world, including ALCOA, Bank of America, Carnegie Mellon, General Electric, Highmark, PNC, PPG, Rockwell International, Sony and Westinghouse.

ERIE CITY MISSION NAMES NEW EXECUTIVE DIRECTORAfter a nationwide search, the Erie City Mission Board of Directors recently appointed Pastor Rick Crocker as the Mission’s new executive director. Pastor Crocker had been senior pastor of First Alliance Church of Erie for the last 20 years.

The Erie City Mission is a Christian social outreach program created in 1911. The Mission has many programs to serve the local community and continues to expand its care programs, including housing the homeless to feeding the hungry.

People Buzz EDITORIAL > Contact: Karen Torres


Red Ocean Strategy Blue Ocean Strategy

Compete in existing market space

Beat the competition

Exploit existing demand

Make the value-cost trade-o!

Align the whole system of a "rm’s activities with its strategic choice

of di!erentiation or low cost

Create uncontested market space

Make the competition irrelevant

Create and capture new demand

Break the value-cost trade-o!

Align the whole system of a "rm’s activities in pursuit of

of di!erentiation and low cost

EDITORIAL > by Angie Angus

Angie Angus is the manager of BOS Programs and Support Services.

ocean of competition, Southwest Airlines now carries about 20 percent of the people who fly within the United States each year. According to the Los Angeles Times, since 1999, Southwest’s domestic markets have increased by 48 percent, while the remaining domestic carriers have seen their combined passenger base shrink 20 percent. The key to their success? Southwest created a blue ocean by ignoring the traditional competitive factors of its industry and instead offering quick, frequent and flexible transportation at attractive prices.

• Cirque du Soleil also went outside the bloody red ocean of the circus industry to create a “dramatic mix of circus arts and street entertainment.” Today, Cirque du Soleil has produced shows for nearly 100 million spectators in more than 200 cities on five continents by taking the traditional elements of the circus – tents, clowns and acrobatic acts – and adding the elements of storyline and artistry, to create new demand.

• Recognizing that most American adults were turned off by the complexity of wine, Australian winery Casella Wines created a blue ocean with the introduction of its [yellow tail] wines. The line’s bright packaging, combined with quality at a lower price point, rejected the idea that wine was intimidating and pretentious. In just three years, it became the most popular imported wine in the United States, with sales of around 4 million cases annually and rising.

Take the Next StepWithout question, tomorrow’s leading companies will succeed by creating blue oceans like these with uncontested market space, ripe for growth. If you’re interested in learning more about how your company can explore blue oceans of opportunity, please plan on attending one of our upcoming one-day Module 1 workshops by registering on mbausa.blueoceanstrategy.com.

Ever feel like your company is swimming in an ocean filled with sharks? Blue Ocean Strategy (BOS) offers you a way to break away from the competition and create a blue ocean of new market space. Based on a study of 150 strategic moves, spanning more than 100 years and 30 industries, BOS is a proven and practical set of tools, methodologies and frameworks to systematically execute breakthrough growth and render the competition irrelevant.But what’s the difference between bloody red oceans of competition and blue oceans of opportunity? In this article, we’ll examine these two schools of thought and why head-to-head competition is no longer the best – or only – option. Red OceansRed oceans represent all the companies in existence today. In red oceans, the rules of the game are clearly defined and accepted: Outperform your rivals to grab a bigger piece of the pie. But instead of realizing increased earnings and growth, red ocean companies have found themselves fighting head-to-head over a shrinking profit pool, forced to choose between differentiation or low cost.

• For example, the airline industry has been “red” for years. Facing slumping sales and increased costs following the 9/11 attacks, domestic carriers have lost nearly $60 billion since 2001. And, according to statistics from the International Air Transport Association, they are likely to lose an additional $2.6 billion this year.

• Circuses like Ringling Bros. and Barnum & Bailey and smaller regional acts – once considered “the greatest show on earth” – experienced decline as public tastes changed following World War II. While their target market was fixated on movie stars like Cary Grant, circuses were focused on hiring performers, presenting multiple show arenas and pushing concession sales, while incurring huge costs in the training, medical care, housing, insurance and transportation of their animals.

• Likewise, the wine industry has continually faced new challenges, with demand and supply changing tremendously. In the industry’s red ocean, cost has typically been the factor that most predominantly determines a brand’s competitiveness.

Blue Oceans Unlike red oceans, blue oceans denote all the industries not in existence today – or the unknown market space. In blue oceans, the rules are not defined – they’re waiting to be set. Blue ocean organizations align their activities to simultaneously pursue differentiation and low cost. They don’t try to outperform their rivals by competing; they beat their competition by not trying to beat the competition.

• For instance, by choosing to swim outside a bloody red

Red Oceans vs. Blue OceansHow Blue Ocean Strategy Charts Bold New Paths in Business Strategy


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January 2010 Business Magazine